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Exhibit 10.3
THIS AGREEMENT MADE EFFECTIVE AS OF THE 12th DAY OF December,
2007 (the "Effective Date") in replacement of a Mineral Rights
Acquisition Agreement (the “Preceding Agreement”) dated
the 29 th day of August, 2007. The purpose of this
Agreement is to clarify terminology used in the Preceding Contract
and remove ambiguities in Schedule A which were created when
Schedule A of the Preceding Contract, which was written and signed
in Chinese, had been translated to English.
BETWEEN:
WORLD FORTUNE ENTERPRISE INC. , a British Columbia
private
corporation with offices at 870 East 54 th Ave,
Vancouver, British
Columbia, V5X 1L7, Canada;
(“World Fortune”)
AND:
ASIAN DRAGON GROUP INC., a Nevada publicly traded
corporation
with offices at suite 1100 – 475 Howe Street, Vancouver,
British
Columbia, V6C 2B3;
(“Asian Dragon”)
PREAMBLE:
The four Properties (collectively the “Fuding
Properties”) referenced in this Agreement (the “Fuding
Agreement”) consist of the following:
Luanchuan Mozigou (MZG) Molybdenum Property
The Luanchuan Mozigou Molybdenum Property
(“MZG”) is located in Jiaohe Village of Luanchuan
County, Henan Province, China and consists of an Exploration
License on a14.09 sq km property;
Lushi Jiashapa (JSP) Vanadium Property
The Lushi Jiashapa Vanadium Property
(“JSP”) is located in the area of Wenguxiang to Dashihe
of Lushi County, Henan Province, China and consists of an
Exploration License on an 8.3 sq km property;
Luoning Xiayu Fanggelewan (FGLW) Silver-Lead Property
The Luoning Xiayu Fanggelewan Property
(“FGLW”) is located in the area of Xiayu, Henan
Province, China and consists of an Exploration License on a 1.75 sq
km property; and
Xiaowagou (XWG) Silver-Lead Property
The Xiaowagou Silver Lead Property ("XWG") is located
in the area of Xiayu, Henan Province, China and consists of an
Exploration License on a 2.13 sq km property.
Collectively these four Exploration Licenses are hereinafter
collectively referred to as the “Fuding Exploration
Licenses”.
No Mining Licenses are currently issued to any of the parties in
this Fuding Agreement regarding the Fuding Properties.
The Fuding Properties have no probable or proven reserves.
The arrangements which form the structure of this contract are as
follows:
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1) |
To create opportunities to explore
properties in China, World Fortune established a business
relationship with the Luoning Fuding Mining Development Ltd
(“Fuding”), a private Chinese company. This
relationship provided World Fortune with the ability to bid for
Exploration Licenses for which Fuding had already applied and been
granted. |
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2) |
In a China Mineral Properties Rights
Purchase Agreement with Fuding (the “Fuding China Rights
Agreement”) World Fortune committed to make payments to
Fuding based upon a payment schedule and Fuding committed to sell
certain agreed percentage interests to Exploration Licenses for the
Fuding Properties once World Fortune had fulfilled all its payment
commitments. |
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3) |
Asian Dragon engaged World Fortune
under an Agency and Cooperative Agreement to act as Asian
Dragon’s agent and source opportunities for Asian Dragon in
China. |
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4) |
World Fortune proposed to Fuding and
Fuding accepted an offer for World Fortune to purchase the
following interests in the Fuding Exploration Licenses: (i) a 100%
interest of a 70% interest in MZG; (ii) a 100% interest of a 70%
interest in JSP; (iii) a 100% interest of a 70% interest in FGLW;
and (iv) a 100% interest of a 70% interest in XWG. Title to these
interests to pass to World Fortune upon full payment for the Fuding
Exploration Licenses per the payment schedule included in the
Fuding China Rights Agreement signed by World Fortune and Fuding on
August 8, 2007. The intent of this Fuding China Rights Agreement
was to provide WFEI with a method to effect the legal logistics to
pass title of its 70% interest in the Fuding Exploration Licenses
into a separate Agreement which it could then sell or assign to a
third party. |
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5) |
World Fortune proposed to Asian
Dragon and Asian Dragon accepted an offer for Asian Dragon to
purchase the Fuding Exploration Licenses upon assumption of World
Fortune’s obligations under the Fuding China Rights Agreement
and payment of share grants to World Fortune and World Fortune or
its nominees. To acquire the Fuding Exploration Licenses Asian
Dragon must fulfill all payments referenced in the Fuding China
Rights Agreement. The governing agreement which executes this
contract is this Fuding Agreement. |
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6) |
Asian Dragon will not have ownership
of the Fuding Exploration Licenses until it has fully completed the
payment terms included in this Fuding Agreement and because the
incorporated Fuding China Rights Agreement includes a damages
clause which would come into force if Asian Dragon were to abandon
its obligations under this Fuding Agreement, Asian Dragon has
determined that this Fuding Agreement does not meet the
characteristics required to record it as an option and therefore a
liability has been recorded in Asian Dragon’s financial
statements pertaining to this Fuding Agreement. |
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7) |
Once Asian Dragon has completed all
payments required by this Fuding Agreement, it will be deemed to
have title to and will own the following interests in the Fuding
Exploration Licenses: (i) a 100% interest of a 70% interest in MZG;
(ii) a 100% interest of a 70% interest in JSP; (iii) a 100%
interest of a 70% interest in FGLW; and (iv) a 100% interest of a
70% interest in XWG. Fuding will own the remaining 30% of the
Fuding Exploration Licenses, but this position may be reduced if
Asian Dragon makes additional payments under this Fuding
Agreement. |
CLARIFICATION OF TRANSLATION MATTERS IN SCHEDULE A - China
Mineral Properties Rights Purchase Agreement:
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1) |
Irrespective of any titles in the
attached Fuding China Rights Agreement (hereinafter referred to as
“Schedule A”) describing Schedule A as pertaining to
“Mineral Properties Rights”, no Mineral Properties
Rights as the term is commonly used in North American currently
exist regarding the Fuding Properties. This clarification is based
on the fact that the North American commonly used definition of
“Mineral Properties Rights” generally describes title
to probable or proven mining reserves. |
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2) |
Irrespective of any language in
Schedule A individually describing each of the Fuding Properties as
a “mine”, no mine as the term is commonly used in North
American exists on the Fuding Properties as these areas are defined
in this Fuding Agreement. |
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3) |
The terms: “mine”;
“Exploration Permitted Area”; “mineral property
rights”; “mineral properties”; “Mineral
Property”; “License”; “mining and
exploration license areas”; and “Permit” all
refer to the Fuding Exploration Licenses which are exploration
licenses. |
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4) |
The use of the terms: “mining
operations” and “ore production” does not mean
that the Fuding Properties are producing mines or that they have
probable or proven reserves. These terms were generically used and
refer to previous exploration activities on the Fuding
Properties. |
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5) |
Paragraph 12 of Schedule A which
states: “This Agreement is binding immediately upon signing
and the non performance Party of this Agreement which can result in
harm to the other party shall be responsible for all the economic
losses”, should have read: “This Agreement is binding
immediately upon signing and if either Party is responsible for non
performance under the terms of this Agreement which results in harm
to the other Party, the non-performing Party shall be responsible
for all economic losses”. |
TERMS:
WHEREAS World Fortune is a private British
Columbia corporation established to source and assess opportunities
in the precious and base metals industries in China;
AND WHEREAS Asian Dragon is a Nevada corporation whose
securities trade on the NASDAQ OTCBB as well as on the Frankfurt
Exchange, and whose business is the acquisition and exploitation
of precious and base metals projects and properties of
merit;
AND WHEREAS World Fortune and Asian Dragon entered
into a Mineral Rights Acquisition Agreement dated August 29, 2007
relating to and exploration permit for the Fuding Properties in
China, such agreement which is being expressly amended and replaced
by this Fuding Agreement;
AND WHEREAS World Fortune has entered into the Fuding
China Rights Agreement attached and incorporated into this Fuding
Agreement as “Sche
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